MINNEAPOLIS — A judge issued an order Wednesday temporarily blocking Britain's Grand Metropolitan PLC from acquiring an interest in Pillsbury Co. and blocking Pillsbury from making any moves to thwart Grand Met's $5.2-billion takeover bid.
The temporary restraining order issued by Hennepin County District Court Judge Thomas Carey lasts until Oct. 27, when the judge will hear further arguments in Pillsbury's lawsuit seeking to block the unsolicited $60-a-share tender offer by the hotel and liquor conglomerate.
Pillsbury sued to block the offer on grounds it violates state tied-house statutes that prevent liquor distillers from selling liquor in retail outlets. Pillsbury's retail liquor outlets include restaurant chains Steak & Ale and Bennigans.
The Minneapolis-based food and restaurant company is fighting the takeover attempt but has not officially responded to the bid. Despite the judge's order Wednesday, Pillsbury still must reject or accept the offer by Oct. 19 to conform to federal securities laws, said Johnny Thompson, vice president of public relations for Pillsbury.
The exact wording of Carey's court order will be worked out at a hearing to, Thompson said.
Thompson said the order, among other things, would temporarily prevent Pillsbury from such action as making major acquisitions.
Allen Finkelson, chief counsel for Grand Metropolitan, said Carey's ruling was important because it blocks Pillsbury from taking action that could thwart the deal.
"That's the first time a judge told them not to do any funny stuff," Finkelson said.
The attorney also said the order could slow the pace at which market professionals buy Pillsbury stock for the purposes of tendering it to Grand Met, thus depressing the stock price.
But Finkelson also said it was difficult to predict the impact of the judge's ruling until it is finalized today.
Pillsbury's stock had been trading in the range of $39 a share on the New York Stock Exchange before the takeover bid. The stock closed up 12.5 cents at $56.875 a share Wednesday.
Patti Berg, an administrative clerk for the judge, said the order temporarily enjoins Grand Metropolitan from acquiring any interest in Pillsbury.
But Finkelson noted that Grand Metropolitan already is prohibited by federal securities law from buying Pillsbury shares until its tender offer expires Nov. 1.
Larry Haeg, a Pillsbury spokesman, said Carey's ruling temporarily maintains the status quo in the relationship between Pillsbury and Grand Metropolitan as litigation in 13 other states related to the tied-house statutes continues. Grand Metropolitan is seeking waivers from the laws, saying it will immediately sell Pillsbury's liquor retail outlets if the takeover is successful.